Should landlords have the right to refuse DSS tenants?

Should landlords have the right to refuse DSS tenants?

10:43 AM, 20th May 2019, About 6 years ago 125

Text Size

And so the onslaught against private landlords continues. Earlier this month, we were shocked to hear that a cornerstone of tenancy law in the UK was to be overturned, with the scrapping of Section 21. Farcically, we were told that a consultation would take place after the decision had been made.

This was an unexpected move, as in fact the Government had been conducting one of their ‘post-decision’ consultations on the idea of ‘3-year tenancies’ (something Shelter had been pushing for). Section 21s had not even been on the agenda. Such is the floundering, knee-jerk politics of today, that a completely different policy decision emerged from it.

The abolition of Section 21s had been called for by the anti-landlord organisation Generation Rent. As part of their campaign, they deliberately misrepresented Section 21 by repeatedly referring to it as a ‘no fault’ eviction – such that this phrase is now used by everyone, as though landlords evict the clients they are dependent on to cover the costs of their businesses, ‘for no reason.’

In fact, as we all know, often Section 21 is used because it is the least awful solution to dealing with rogue tenants. The anti-landlord representatives say it means landlords can evict ‘at a moment’s notice’ when in fact, although it is supposed to take 2 months, the average time taken is 6-7 months if the tenant does not want to leave. During this time, the tenant is often paying no rent.

The reason the only other possible Section – Section 8 – is not used as often is because the tenant can raise spurious defences, for example lying that the house is in disrepair.  The judge often then adjourns the case and the tenant gets even more months rent-free, while the landlord is pushed further into debt through no fault of their own – some even have to take out loans to cover the mortgage on the rental in which the tenant is living.

This is not only costly financially; a survey has found that private landlords’ mental health also suffers significantly because of, amongst other things, the way that the system is set up to enable these rogue tenants to ruin landlords financially, especially, as it is often the case they also wilfully wreck the property. Landlords’ mental health | National Landlords Association

This can cost landlords tens of thousands of pounds. No-one in Government is looking at this issue at all. The demonisation of private landlords has gone so far, hardly anyone in politics or the media is speaking up for them, despite them facing these gross injustices and the legal system completely letting them down.

And now, if, as is expected, the Government continues with its move to scrap Section 21, ‘charities’ like Generation Rent and Shelter will start pushing for the next punitive measure against landlords; the most likely contender for this is to somehow force landlords to take tenants on benefits, even if this is not the client group landlords wish to occupy their properties.

Shelter has been conducting a campaign on this for some time and various Government Ministers have jumped on the virtue-signalling bandwagon. Shelter has even been bullying landlords and letting agents into removing the words ‘no DSS’ from adverts and they also threatened to sue a letting agent, before the agent settled out of court, rather than face the stress and costs of a court case. Shelter now represents this as a legal victory and claims it is now recognised as discriminatory to specify ‘no DSS.’ It isn’t. Being in receipt of benefits is not a protected characteristic according to equal opportunities legislation. Settling out of court to avoid the stress and costs of a £60 million ‘charity’ hounding you through the courts does not create new law.

As part of their campaign on this, Greg Beales, Campaign Director at Shelter, has claimed that there is no evidence that tenants are benefits are ‘less-good’ tenants than others. There’s ‘no evidence that people on benefits are ‘less-good tenants’, says Shelter spokesman

He said that, given that, landlords and letting agents who do not accept those on benefits are engaging in ‘disgusting’ and ‘immoral’ practices. https://inews.co.uk/opinion/comment/housing-benefit-renting-no-dss-shelter/

Such rhetoric demonstrates his ignorance. Of course as Shelter provides no housing to anyone, they would not have first-hand experience of the issues involved. As landlords, however, we know that there are many reasons why it makes no sense to accept people on low wages and/or on benefits. No amount of banning landlords and agents from specifying ‘no DSS’ will change these facts.

Some of the reasons why it often does not make sense to accept people on benefits as tenants:

  1. Tenants on benefits often cannot afford the rent. This is partly because benefits have been capped and have not kept pace with market rents. Housing benefit on average only covers 57% of the cost of a private rental. https://speyejoe2.wordpress.com/2018/08/23/dear-polly/ What I want to know is: why would a person agree to rent a home to someone who so clearly cannot afford to rent it?
  2. The housing element of benefits, including in the new Universal Credit system, is paid in arrears, and landlords need the money in advance as that is when they pay their mortgages. Working tenants pay in advance and are therefore able to meet the terms of the tenancy agreement.
  3. If for some reason the tenant does not make the benefits claim in the right way, on time or at all, or if they do not turn up for an appointment, lie or make a mistake in reporting on any work they’ve done for example, the benefit can be stopped. The landlord then does not receive the rent because of something the tenant did or didn’t do. Large amounts of arrears can accrue in this way, which the landlord will not get back.
  4. If it is discovered that the tenant in some way claimed fraudulently, the authorities have been known to threaten the landlord and/or ‘clawback’ the money by not paying the rental element for another claimant the landlord is housing. A landlord was recently threatened with having to pay back 4 years of the housing element paid to him, because of a fraud by the tenant. What landlord wants to face this prospect, when they can simply house people in work?
  5. If a tenant does not pay the rent and is evicted owing a lot of arrears and/or having caused damage to the house and the landlord has incurred legal and court fees, with a working tenant they can apply for an attachment of earnings and eventually the debt can be repaid to them. With a tenant on benefits there is no employer on which to apply an attachment. There is therefore no way the landlord can ever recover the debt.
  6. If a tenant is on benefits and/or on low wages, they may struggle to heat the house. Without proper heating and ventilation, the house may fall into disrepair. If the Environmental Health Officer then calls around, they will most likely blame the landlord for the disrepair. So the landlord’s home is adversely affected and they then face possible fines.
  7. People on benefits naturally spend more time at home. This increases wear and tear on the property.
  8. Often insurance companies and lenders specify that they will not accept tenants on benefits. In such circumstances, if the house burnt down for instance, the landlord’s insurance would be invalid. In terms of contravening the lender’s requirements, the landlord could face the liquidators being called in if the lender finds they have contravened the terms of the mortgage. The landlord could face a demand to immediately pay back the capital; this will usually be impossible. The landlord in this situation would face huge losses, purely because they had accepted as a tenant someone on benefits.
  9. Because of the Government’s fiscal attack on private landlords – most outrageously and absurdly in Section 24 of the Finance (no.2) Act 2015, which means landlords now cannot offset the finance costs of their businesses before calculating profit – it is imperative that landlords select the tenants with the greatest means and get the rents as high as they can go. This is not for the landlords’ benefit, but rather to pay the huge new tax liability, which can exceed 100% of actual profit. This is explained in a briefing paper I wrote for the Institute of Economic Affairs with the economist and professor Philip Booth. Taxation without justification — Institute of Economic Affairs
  10. Also, if Section 21 is scrapped, landlords face tenants being granted lifetime tenancies. If this is the case, then landlords will want the best possible tenants to occupy their properties – ones who have no problem paying the higher rents forced on the sector by the Treasury and ones who, as mentioned, can afford to look after the house properly. This will greatly restrict the options for those on benefits. As the economist Ryan Bourne has stated: “The results of this policy are therefore obvious to anyone who understands basic economics. First, landlords will be far less likely to rent to tenants they consider high-risk. The incentive to engage in serious vetting, demanding extensive guarantees from tenants, will skyrocket. https://www.telegraph.co.uk/business/2019/04/26/no-fault-evictions-ban-epitomises-paucity-tory-economic-thinking/

This final point demonstrates how various forms of Government interference in the private rented sector are having the opposite results to the alleged intentions. One change causes landlords to not be able to take on tenants on benefits; the next tries to ban them from not taking on tenants on benefits. We all know the next will be rent caps. It is like trying to shove a lid on a boiling pot when it is about to boil over.

And at the same time that they are trying to ‘disallow’ landlords from having control over their own assets, are ‘disallowing’ landlords from offsetting their finance costs, and ‘disallowing’ landlords from choosing the tenants they want, they leave the social sector completely alone despite 61% of eviction notices actually coming from this sector 24housing and despite the fact that this sector also is moving away from accepting tenants on benefits.

As an expert on this said: “Shelter and the National Housing Federation are engaging in deliberate known deceit in their combined campaign over NO DSS in the private rented sector – A campaign that is so superficial it shames them both…Social landlords… do routinely operate affordability tests and they do refuse to accommodate the benefit tenant and thus they operate the same NO DSS practices as the private landlord.” https://speyejoe2.wordpress.com/2018/08/23/dear-polly/

Where is the hue and cry about that?

No. They turn a blind eye to this, because they are fixated to an almost manic degree on private landlords; a fixation which is already starting to wreck people’s lives by pushing them out of housing.


Share This Article


Comments

ameliahartman

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

1:44 AM, 10th June 2019, About 6 years ago

Obfuscated Data

Dr Rosalind Beck

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

8:17 AM, 10th June 2019, About 6 years ago

I'm sorry, but I don't believe what you are posting here. I think you are not a landlord. What you say flies in the face of so many people's experience and also the data on arrears due to UC in particular. The 'fact' that you know what is happening within Shelter indicates to me that you are probably an employee of theirs.
I stand to be corrected.

Dylan Morris

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

8:54 AM, 10th June 2019, About 6 years ago

Reply to the comment left by Dr Rosalind Beck at 10/06/2019 - 08:17
You are correct Amelia is a troll. Ignore her posts.

ameliahartman

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

9:33 AM, 10th June 2019, About 6 years ago

Obfuscated Data

Dylan Morris

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

9:45 AM, 10th June 2019, About 6 years ago

Reply to the comment left by ameliahartman at 10/06/2019 - 09:33Please accept my apologies Amelia I shouldn’t have posted that you are a troll it’s not very becoming of me and something I have never done before on a forum. Please allow me to retract my comment. I appreciate your honesty in telling us your husband is employed by Shelter and your sister is a Shelter case worker. I didn’t realise this, but now I do your posts make complete sense.

Chris @ Possession Friend

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

10:28 AM, 10th June 2019, About 6 years ago

Reply to the comment left by ameliahartman at 10/06/2019 - 09:33
Wow, what a difference in the language and Grammar from this posters earlier brief posts
( unbelieveable )

Badger

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

10:40 AM, 10th June 2019, About 6 years ago

I think Amelia's posts bring much needed and interesting new insights into the P118 community.

As a body here at P118 I think we are all too ready to dismiss views that do not conform with mainstream landlord thinking as "trolling".

Trolling is a crazy word anywhere which in my experience is almost always deployed in an attempt to silence others whose views differ from one's own and this regard I absolutely abhor it. This is not me having a go at Dylan (who has in any case apologised graciously) but just a general rant against my wider experience of how certain types of people on the internet, who generally regard themselves as more enlightened and intelligent than the rest of us, seem to think it is perfectly okay to try and shut others down by accusing them of being trolls whereas, if the truth be known, the "troll" is as often as not committing no more of a "crime" than daring to espouse a view which does not conform to the "norm" as ruled on by those who would sit in self-appointed judgement on the "troll".

Greater openness is required on all sides so that alternate views can be properly aired and considered without being shutdown because others disagree. Only that way can we all move forward and try and solve some of these difficult challenges. Amelia's views are therefore very welcome offering as they do considerable insight into another way of doing things. Many landlords have expressed views on why they would find Amelia's way too difficult to follow, but that does not mean it is impossible.

[Full disclosure: I am one of those that would not be able to bring to bear the level of input required to run things Amelia's way - largely because I live too far away from most of my units anyway.]

Ian Narbeth

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

11:19 AM, 10th June 2019, About 6 years ago

Reply to the comment left by ameliahartman at 10/06/2019 - 01:44
Amelia
Thank you for your helpful posts. Many landlords are "hands off" and don't have the time, inclination or experience to get involved in the way your husband and you do.
You write: " I wouldn’t have a clue about the student market, other than the properties have to be fully furnished, and they are likely to need a lot of work after the students move out so you can ask a much higher rent!! Just rent it out 11 months of the year. The holiday market? Air BnB is the easiest. But you would need to talk to someone who has experience."

Would you like to be told you have to let to students? Of course not.

Most landlords don't have experience of the benefits market and if they have a small portfolio don't want to increase the risk of a defaulting tenant destroying their investment. Landlords see and read about horror stories of impecunious, deceitful and sometimes aggressive tenants leaving landlords with rent arrears and thousands of pounds of damage that they will never recover. They also see tenant charities helping these people, all the while slandering landlords generally as rogues.

Look at Mick Roberts' posts on this Forum. He is very knowledgeable about benefits tenants and makes the point that compared to people not on benefits they require many times more management time. Why should landlords not be allowed to choose not to enter that market?

If I can give an analogy (and I know analogies are never perfect), should all restaurants be required to offer a vegan option? Perhaps more provocatively, should all vegan restaurants be required to offer a meat option for the meat-eating companions of their vegan customers?

MoodyMolls

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

17:01 PM, 10th June 2019, About 6 years ago

Reply to the comment left by ameliahartman at 07/06/2019 - 23:49
Hi Amelia
Interesting to hear a more positive account of DSS. For many years I rented to this market and didnt get many arrears and payments stopped all the time. But as soon as monies went to the tenant the arrears came thick and fast the housing element dropped so far below market rents that many could not make the difference up. The properties started getting trashed and one year I evicted 10 tenants.
I cannot afford now to take the benefit tenants but this is a direct result of UC and the 30% pentile , Section24 now losing Section21 which is also a massive deterrant.
I am not surprised you have so many tenants applying for the properties there has been a massive drop in landlords taking this sector. What area are you based and do you rent rooms out as well.? Is your area market rents close to the LHA rate?

I agree with Mick Roberts on damage by large families I have one with 6 children and the door handles all the time so much that my firedoors are ruined the same for the cupboard doors.
So I would say definitely more wear and tear.

The other area now is if you do rent to the benefit sector you are now accused of robbing the public purse and the media and Shelter condemn landlords all the time.
The daily mail even printed a lists of the landlords with the highest benefit take in all the areas.

Mick Roberts

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

17:18 PM, 10th June 2019, About 6 years ago

Reply to the comment left by MoodyMolls at 10/06/2019 - 17:01
That's exactly it Moody.
We house the homeless then the Labour activists who hate Landlords tell us we money grabbing greedy Landlords. Where they gonna' live then?

Ha ha yes I was on that Daily Mirror list a few years ago. I had tenants telling other tenants OOh he's loaded he is, look how much he getting. And they said He should let us off the rent when we skint.
Ignoring the fact that mortgages have to be paid & repairs.
And now Licensing and more UC arrears.

If any of u can find yourselves on it. Looks like they've took away the search postcode feature to find your council.

https://www.mirror.co.uk/news/ampp3d/interactive-housing-benefit-millionaires-your-5569676

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More